Extended Stay America rises in market debut

NEW YORK (AP) — Hotel operator Extended Stay America stock jumped in its first day as a publicly traded company.

Shares traded as high as $23.90, or 19.5 percent shortly after the opening trade Wednesday. The gain pared to $3.01, or 15.1 percent in late morning trading.

The initial public offering of about 28.3 million shares priced at $20 each, the midpoint of the projected $18 to $21 per share range. Each share includes common stock of Extended Stay America and Class B common stock of real estate investment trust ESH Hospitality Inc. The offering is expected to help ESH Hospitality maintain its qualification as a REIT.

Extended Stay America Inc. raised approximately $566 million in the offering. Most of the proceeds will go toward repaying certain debt held by ESH Hospitality.

The underwriters have a 30-day option to buy up to an additional 4.2 million shares.

Extended Stay America hotels are meant for guests looking for an affordable option when they are anticipating a somewhat lengthy stay. Guests typically include business travelers, professionals on temporary jobs or training assignments, people relocating, temporarily displaced by a storm, home purchase or other event and any others in need of temporary housing.

Fully furnished rooms include kitchens and limited housekeeping services. Rooms are normally rented on a weekly basis or more long term.

Extended Stay America's stock is trading on the New York Stock Exchange under the "STAY" ticker symbol.